IT Employment – What is the real story with all those unfilled IT jobs?

While there may not be any such thing as a truly “recession-proof” job, it would seem from various media reports that there are numerous unfilled IT jobs going in these harsh economic times. Jobs in IT, in particular, are going aplenty in the US, Ireland and the UK which could be filled except for one substantial constraint – skills shortages. The media have jumped on this story like bees to honey and numerous articles,  radio interviews etc have all been dedicated to solving this conundrum. The usual suspects have all been rolled out for examination: lack of focus in education, inadequately qualified teachers, falling standards in mathematics etc.

Blog posts in this series:

So what, precisely, is going on? Where and what are these jobs? Who’s to blame?

We wanted to know a little more about these jobs going abegging and where those vacancies arose. After all, there seemed plenty of anecdotal evidence that companies were struggling to attract qualified candidates. We undertook a study over the summer months taking a look at nearly 5,000 IT jobs being advertised in Ireland. The Irish IT jobs market seemed a good choice, a manageable number of jobs to analyse while the majority of the world’s leading IT companies all have a presence in Ireland.

But first, a little background.

What’s all the fuss?

Lets kick off with a few tales from the US and Ireland and see what everyone is saying.

Mitt Romney, a top candidate for the Republican presidential nomination, recently unveiled his plan for economic recovery. A significant proportion of his plan addresses, he claims, attempts to correct the 1.25 million high tech jobs which are unfilled in U.S. computerworld.com September 7, 2011

What?? 1.25 million jobs?  Well, not quite according to CompTIA president Todd Thibodeaux who in August 2011 put the figure at 400,000 IT jobs which are unfilled in the United States today. channelinsider.com August 2, 2011

Microsoft got in on the action too. “Filling our talent need remains a serious challenge,” said Microsoft general counsel Brad Smith, in testimony before the Senate Judiciary Committee’s subcommittee on Immigration, Refugees, and Border Security in July 2011. Smith said that as of May, Microsoft had 4,551 job openings–including 2,629 computer science positions–but it’s taking the company up to 65 days on average to find qualified workers for open spots. informationweek.com July 29, 2011

Stories in a similar vein have circulating in the Irish media this summer:

“There are currently some 2,500 unfilled jobs within the technology sector, according to Dave Feenan of CloudArena, a major Dublin conference on cloud computing learned today.” businessworld.ie June 16 , 2011

“ICT Ireland director Paul Sweetman claims between 3,000 and 4,000 jobs within the information and communications technology sector currently remain open, noting that some 1,500 jobs were added this year alone.” irishtimes.com May 27, 2011

“At a recent Intel Open Forum on Transforming Education, the CEO of Fujitsu Ireland Regina Moran, said 75pc of ICT employers in Ireland have job vacancies. Moran said IT employment in Ireland was up 6pc year-on-year, at a time when high unemployment is of high concern. “But 75pc have vacancies and more than 50pc have at least 20 vacancies.” Moran said it was a huge problem for the industry in that the skills shortage means firms are competing against one another for suitably qualified graduates.” siliconrepublic.com May 26, 2011

“Now we have lots and lots of jobs for those people. I think if we had the graduates coming through, we could sort those highly skilled positions” says Dermot O’Connell, general manager, Dell Ireland who believes it is a bit unfair to target the capabilities of Irish graduates, “There are just not enough computer graduates” irishtimes.com May 27, 2011

“We need to look at the whole visa system for what I would call catalysts in an organisation,” says Dermot O’Connell, general manager at Dell Ireland. A catalyst is a person critical to enabling a new project, or a new research and development area, to gel. O’Connell points out that a whole team of additional jobs will assemble around that individual, from executives to other parts of an implementation team, with the promise of many future jobs. If visas take three months, “that’s when specific projects within a multinational will go to another country”. Bye bye jobs. irishtimes.com May 27, 2011

So now we have the diagnosis, what’s the cure?

So, it seems, all we need are more graduates and an opening up of visas so that skills can be imported from abroad.

Mitt Romney, Microsoft’s Brad Smith and Dell Irelands Dermot O’Connell have all argued for a wider or greater number of visas. Both Romney and Smith have suggested a greater number of  temporary H-1B and L-1 visas in the US. Romney’s plan includes a proposal “to raise the ceiling” on visas for holders of advanced degrees in math, science “who have job offers in those fields from U.S. companies. These workers would not displace unemployed Americans. Rather, they would fill high-skill job openings for which there is currently an acute shortage of labor.

Education has also come under the spotlight, the combined education systems of the US, Ireland and Britain are seemingly collectively failing to produce graduates required by the IT sector. According to Microsoft’s Brad Smith, “The U.S. educational system is not producing computer scientists and engineers in sufficient numbers to meet domestic demand.” and “U.S. immigration policies need to be relaxed to make it easier for companies like Microsoft to import workers to fill the gap.”

Hmmm, seems like they’re all singing from the same hymn sheet doesn’t it.

The figures are correct, right?

One of the most alarming aspects of the various reports above is that figures are being trotted out without any attribution whatsoever. At its most alarming, we have the enormous disparity between Romneys 1.25 million versus 400,000 reported by CompTIA.

In Ireland, a debate has been started about the role of education based on the interviews and statements listed above. Again, however, figures are quoted without attribution – 2,500 unfilled IT positions according to one source, 3,000 – 4,000 according to another. In fact, the Irish Times carried two articles listed above on the same day by the same journalist, one article states that 1,250 IT jobs were added in Ireland in 2011 while in the other the figure had risen to 1,500.

Have any of the spokespeople for the IT sector been asked to support the figures they claim in their statements?

Graduates – just having a good time and taking all the wrong courses?

The ICT industry in Ireland employs approx. 74,000 people with a further 200,000 supporting the sector. A certain volume of IT graduates are required every year to replace those leaving, through emigration and retirement etc, and to bring new skills to the sector.

An examination of the Higher Education Authorities statistics shows that 2,723 graduates and postgraduates completed their IT related courses in 2010 – not a staggering figure but certainly enough to meet the 1,250 (1,500?) additional jobs reported by the Industrial Development Authority. The HEA believes that “IT graduates have been climbing over the last few years as enrolment decreased dramatically after the dot.com bubble burst. There was a perception that there was little or no employment prospects in this sector.”

This conviction would appear to be true as 15,071 students are currently enrolled in IT related courses from diplomas through to students undertaking PhD’s.

It would seem that there is an adequate volume of IT graduates. The more appropriate question may be whether the courses are meeting the current technical requirements of the industry. How many of those graduates are emigrating and, if so, why? Are the jobs on offer appropriate to the qualifications of graduates? Are they, in fact, IT jobs or jobs which happen to be in the IT sector?

Over the next number of weeks we will be exploring the IT jobs advertised in the summer months and seeing if we can answer some of those questions posed above so be sure to check back with us.

We’ve put together an extract of the HEA statistics mentioned above, the data is available here.

So wages and salaries have gone through the roof right?

The IT job market would certainly not appear to be an employer’s market according to the claims outlined above. With such a skills shortfall, it’s reasonable to assume that its boom time for those IT workers willing to change employers. Right?

Information Weeks Global CIO has been running an annual US Salary Survey since 2000. In 2001 they had 19,206 respondents while they received 18,201 respondents in 2011. The median base salary for an IT Architect in 2001 was $90,000 whereas in 2011 the median base salary was $112,000. If those salaries kept pace with inflation, the median base salary should now be $115,000 (source: US Inflation Calculator), whereas, in fact, the median base salary has lowered by $3,000. The Global CIO study shows that the lot of the US IT worker, in comparisons with 2001, shows reductions in pay, bonuses and sentiment – “IT Salaries: 9 Ways We’ve Changed (Or Not) From 2001′s Heyday

As any student of economics will know when a shortage occurs prices inevitably rise. So where, we might ask, are the rising salaries?

Any other factors spring to mind?

The debate so far has focused on graduates and visas. One variable which has not been discussed to date has been the impact of the global collapse in the real estate market. IT jobs tend to cluster; US IT jobs tend to be located in Silicon Valley and Silicon Alley as well as Atlanta, Chicago, Houston and Washington DC. London dominates the UK jobs market and Dublin the Irish IT jobs market. The collapse of house prices may mean that many IT workers are now less mobile as any location change will inevitably ask the employee to realise their negative equity. While not every IT worker is a householder and owner of a mortgage, it would seem logical that a proportion of IT workers have become less mobile – any change of location may require someone to sell their property for a fraction of the value they initially paid.

“Many people are under water on their mortgages and they can’t move…So, they lost a job in Las Vegas and can’t move to L.A. because of their mortgage.” Mark Zandi, Moody’s Analytics

Well they would say that wouldn’t they

Steven Davis of the University of Chicago Booth School of Business who recently co-wrote a paper on the subject of skills shortages states that “Our best estimate is maybe 20 percent of shortfall in hires per vacancy in the last couple of years can be accounted for by lower recruiting intensity by employers.”

So it seems employers may be placing ads, they don’t appear in a rush to fill vacancies.

An obvious benefit for employers advocating higher IT graduates and opening up of visas is to flood the pool of candidates and allow employers to lower the salaries and benefits of their staff.

Blog posts in this series:

Claims of skills shortages are a serious issue and one which requires investigation and consideration. I’m not suggesting that employers are engaging in a cynical exercise to flood the candidate market, I am suggesting that we need a little more analysis than the fevered rush to press we have witnessed to date.

Over the next few weeks we will be publishing the outcome of our IT jobs study. We will show the number and location of jobs advertised and the type of jobs being advertised, whether for developers, social media marketers, system admins etc. The study should be of interest to candidates and employers alike and will hopefully give some insight into the current IT jobs market.

Next week we’ll have a look at an overview of the jobs advertised so make sure you check back for a very interesting look at some current IT employment trends.

A special note of thanks to Fergal Noone of the Irish Higher Education Authority for all his assistance with graduate and undergraduate statistics.

If you are an IT contractor or employer looking to connect with each other, check us out at RoleConnect.com

Share and Enjoy:
  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
  • LinkedIn

Tags: , , , , ,

5 Responses to “IT Employment – What is the real story with all those unfilled IT jobs?”

  1. Andrew October 3, 2011 at 7:40 pm #

    Great article. My own experience is that whilst I am being rung every week by job agencies with positions to fill, none of them are offering as much money as my current position, a job that I am very happy with anyway, so there”s just no way they”re going to tempt me to leave.

    Permanent jobs offer better career prospects than contracting but despite being offered one potentially very interesting role with a fast-growing company, it was permanent and meant not only a drop in salary, but a hug increase in tax liability too with unknowable and doubtless nasty tax increases pretty much guaranteed down the line. I turned it down.

    So whilst everyone says they want top software talent, they”re either not prepared or not able to pay for it. I suspect it”s a bit of both of those reasons: money”s tight and the last thing management want is to spend a large proportion of their budget on salaries for “geeks”.

    I”m not motivated solely by money, in fact mostly by the chance to excel at my chosen profession of software engineering but as I am happy and challenged where I am, it will take at least a 10% rise and the promise of a role at least as interesting as the one I”m in to get me to move – and that just isn”t happening.

  2. Patrice Fanning October 13, 2011 at 7:07 pm #

    Really interesting article Kieran. I agree that this issue goes way beyond a lack of skilled labour. I look forward to seeing the results and analysis of your study!

  3. deb November 14, 2011 at 4:41 pm #

    I have my resume posted on several job boards, get daily email alerts and apply to anything that fits my qualifications. I can”t believe all these jobs are for real.

    Most of the contacts are for sales or franchise???? What the heck, I have an all IT resume and 15 years experience. Plus I”ve gotten offers that are obvious scams much like the Nigerian email scams. Then legitimate jobs take applications for 3 weeks and end up with 150 applicants for one position. Recruiters from India you can”t understand trying to fill jobs in an area for skills they no nothing about. It”s hard enough looking for a job without spinning your wheel on a waste of time position.

    It”s pitiful, I just want a damn job that pays a reasonable pay. I”m so frustrated.

  4. William May 26, 2012 at 9:12 pm #

    Yes I don”t get that.
    Companies in Ireland complain that they don”t have skilled candidates to keep their business growing, but want they offer you a job the salary sounds like a joke.
    They want to pay sometimes 40-45k for a Senior Software Engineer (over 5-6 years experience after college).
    They just treat you as they don”t need you, don”t really make an effort to keep you… what they really want is experienced and cheap candidates, not just experienced and talented.

    Seriously…

  5. Tomas McGuinness May 30, 2012 at 1:03 pm #

    Well, if you pay peanuts you”ll get monkeys. A salary of 40-45 sounds low, but could come with a large bonus or excellent pension. It might be in a small town, with a lower cost of living. It might have shorter working hours. It”s hard to judge a position like that just on salary without taking other things into consideration.

    Thankfully however, since there are more openings than candidates, the market law of supply and demand will leave a low paying opening unfulfilled.

    It”s also worth noting that years of experience is something I”m slowly learning to disregard. It”s not about quantity but quality. I”ve seen people with decades of experience have graduates run rings around them and I”ve seen graduates incapable of following the simplist of instructions.

    And of course they want everything cheap. When running a business, who doesn”t :) They just can”t have their cake and eat it.